Petrochemical Update: Gauging industry digitization – capital projects turn to innovation, recruitment teams
Posted by Alex Donatelli on Jul 13, 2018
Market surveys reveal the downstream industry lags other sectors in adopting digital technology to boost productivity, but significant capital investment is pushing innovation and changes to education faster than ever before, executives told Petrochemical Update.
Petrochemical Update and Autodesk brought together a group of science, technology, engineering and project management experts to discuss and debate the role of technology in helping the construction and engineering industry rethink the future of capital projects.
Jacobs Engineering, Wood PLC, Day & Zimmermann, Air Liquide, Cheniere, LyondellBasell, Braskem, Pathfinder and Huntsman were among the executives debating at the roundtable hosted during the 2018 Downstream Engineering, Construction and Maintenance Conference and Exhibition in Galveston, Texas.
While the energy industry is frequently perceived as lagging other sectors in the race to adopt digital technology, these executives expressed optimism for the future of the industry, recruitment, and not just adopting, but creating innovative technology.
This picture, despite the relatively low scores the industry has received in previous industry technology surveys.
Significant capital investment in the energy industry because of the Shale Renaissance is pushing digital transformation now more than ever, the experts told Petrochemical Update and Autodesk.
There are 325 projects cumulatively valued at $194 billion in capital investment that has been announced since 2010, with 49% of the investment completed or under construction, 45% in the planning phase, and 6% of unknown/delayed status, according to the American Chemistry Council (ACC).
This 325 number has skyrocketed over the last five years from the 97 projects worth $72 billion in investment in 2013.
Digital transformation is proving to be disruptive, however. In the downstream industry, companies see evidence of that disruption, as technology enables greater efficiency, speed and innovation in everything from construction and manufacturing to the supply chain and marketing.
The big players leading the technology shift include Uber, Twitter, Amazon, AirBnB, LinkedIn, Facebook, Snapchat, Google and more. These companies have found success by understanding and pushing digital disruption technology including the use of data powered analytics, cloud computing, automation, asset visualization, mobility, and social media.
But the demographics of the employees in these high-ranking companies has been significantly different than the energy companies, delegates pointed out at the roundtable.
Over the last 10 years, there has been a decline of new entrants age 16-24 years old coming into the industry by about 32%, according to Construction Users Roundtable (CURT).
By 2030, that will be about 60%. At the other end of the spectrum, those turning 55 and older, has increased over the last decade about 63%, and expected to be about 83% by 2030.
The downstream industry wants to move forward more so but getting there is a complicated transition process for an older industry.
“There are people, there is heritage, there is the way it has always been done. These are the things we must address to effectively make change happen,” said Clayton Bartlett, Senior Manager of Digital Strategy for Jacobs.
The industry needs to stop doing things the way ‘it’s always been done,’ and listen to the innovation and ideas coming from the new generation of workers, they echoed.
“We need to make it so that young people want to work in the construction industry,” said Alexis Thorne, Director of Engineering for Air Liquide. “Construction managers are in their late career stage, they will retire and their knowledge leaves with them. We need technology to help recruit the next generation of workers.”
The industry’s image to many young workers is that it is dirty, old, unsafe and consists of workers with a high divorce rate, the managers said.
“The number of stem graduates coming into our industry is declining. They are going into computer engineering, software engineering. They are not coming into the construction realm or the hard engineering historical design aspects,” Bartlett said.
“We have to use technology to our advantage to supplement for that.”
The issues begin with awareness at the education level, a consultant said
“Universities in the northeast don’t even teach “Project” engineering. It’s your traditional disciplines such as mechanical, electrical, etc., which are taught well, but 90% of those students go into fields such as product development or research and development. Most students don’t enter into Engineering and Construction or Project Management due to a lack of recognition that the disciplines exist,” said Steve Cabano, director of Pathfinder, LLC.
“The further south you go, schools are beginning to recognize that there is a project need,” Cabano said. “You have to make the project training specific, and fun, to attract the new generation of workers. It has to be cool – like online gaming.”
Larry Lambert of Cheniere Sabine Pass pointed out that project engineering and management classes at the University of Houston have professional field people teaching classes.
It is not just about using technology to recruit, but also changing some of the most fundamental work processes.
Bill Wasilewski, President of Day & Zimmerman told the story of how his son’s first mechanical engineering job was with an EPC, but he quickly left because he was not challenged enough.
“He got into the industry and realized what he was becoming was a specifying engineer, not a design engineer. In his gut, he wanted to do actual design work. He realized what he was doing was writing specs and looking through vendor catalogs to see what the closest thing to it was, so it just was not challenging to him to be a specifying engineer,” Wasilewski said.
“I think that is pretty common across engineering firms.,” Wasilewski said. “But what if you twist that around and say let’s cut that different, let’s team up a mechanical engineer with a process engineer and say you are responsible for a system now.”
Lambert has seen success with this at Cheniere.
“The most engaged young engineers I have seen are those that not only design it in the office, they follow it to the field until it gets done and they see the finished product and it makes them a stronger engineer by seeing the practical application and they can contribute to the constant improvement of the system as well,” Lambert said
Oldest new plants
Some observers suggested that when it comes to building and designing new plants, the industry suffers from a ‘way it has always been done’ mentality.
“How do we build for tomorrow is my goal?” Bartlett said. “My biggest goal is how do we stop building the oldest new plants. If you were to walk into old plants and then new plants today, they are still very much delivered the same style same way.
“How do we stop that, how do we remove those boundaries? How do we take technology and investigate it in an entirely new aspect? These are the things our industry must consider.”